One of the first assignments I had to do whilst on the course ‘Scaling Up Your Venture Without Screwing Up’ from Stanford Business school, was to do a post-mortem of my company.
Why such a grim way to start a course that is meant to excite you to grow and scale your business?
To get to grips with the brutal reality that nine out of ten start-ups fail.
However, there are two types of failures: the one that sinks the ship and the other one that steers it and is part of the learning and growing process. But how do you know which one is which to avoid your start-up premature death?
You get educated, learn from others who have been where you want to go, get insights from their journey. It also pays to get to know people with deep pockets, who can give you money when you need it, people who can open doors to their networks of equally influential people to help you access further resources. Do not also forget individuals who can connect you to the marketplace for you to sell your products and meet like-minded people who are on the same journey to exchange experience and get inspired.
The most fatal challenges for new ventures are the lack of financial resources, start-up experience, talented team and knowing how to seize opportunities in the marketplace.
How fabulous would that be if as a start-up, you could shorten your learning curve and succeed more rapidly by failing fast and cheaply rather than late and expensively? Wouldn’t life be great?
Well, this is the aim of Accelerators, which go beyond providing a co-working space or shared services like Incubators do but rather offer a much more structured program that help start-ups or ventures to increase their chance of success.
But knowing that there are Accelerators out there to help companies grow is only half of the problem solved. How do you know which one will be the most beneficial to your particular venture? How to choose the right start-up accelerator to avoid wasting time or even damper on your chances of success because you received the wrong advice?
All accelerators are not created equal and do offer different types of services, business support and are backed by different stakeholders such as policymakers, private investors, universities and corporate with their own agendas and their pluses and minuses.
In a report published by Nesta, A look inside Accelerators, the authors Bart Clarysse, Mike Wright and Jonas van Hove list the characteristics of the main Accelerators in Europe and provide a useful framework to select the right acceleration based on your needs.
They identify the main archetypes of Accelerator based on who fund them and their objectives. Here is a summary of their work I have gathered in the form of an infographic.
Key takeaways: there are different acceleration programmes depending on its main funder/archetype and their objectives:
- The investor–led model focuses heavily on mentoring by serial entrepreneurs and business angels who know how to create legitimacy for follow–up investments.
- The matchmaking model: focus on helping start-ups navigate the complex decision–making structures in corporate customers. The mentors and internal coaches in these corporate tend to guide the entrepreneurs to the right decision makers.
- The ecosystem builders tend to be more programme–led and develop intensive workshops and training sessions to help the ventures find their way to applications or first customers.
Although this study focuses on European accelerators, there are great similarities with the ones across the globe. So if you are an entrepreneur who need to choose the right acceleration programme, be clear on what you need the most: do you need a lot of funding? Choose an investors-led program. Is it access to market you are after? Go to a matchmaker. Are you developing a typical technology and do not want too much pressure to deliver in the short term? Choose an ecosystem builder.
Some interesting breeds of ecosystems builders are surfacing such as the Enterprise hub of the Royal Academy of Engineering, a UK not for profit organisation, supported by a network of partner organisations, where only the best engineering projects are selected. It provides members with a £60k grant, a range of training, mentoring and coaching but doesn’t take any equity.
There is also the brand new OneRagtime, a combination of VC, accelerator, digital platform, corporate matchmaker and ecosystem builder with the ambition to disrupt the traditional VC funding model and covers global projects.
It is possible to adopt a hybrid configuration with elements borrowed from other type of accelerators. But be careful and have clear objective to avoid conflicting or incompatible objectives. When there are different stakeholders involved in funding an accelerator, it can lead to double objectives to manage and make delicate the successful running of the accelerator.
The new highly publicised ground-breaking cyber security program in the UK in partnership with Wayra and GCHQ is an interesting case of multi-stakeholders’ partnership.
In part 2, we are going to explore how various organisations that are interested to create an accelerator can ensure they choose the right model that suit to their objectives.
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About Francine Beleyi
Francine Beleyi is a digital strategist, change consultant and entrepreneurial journalist who helps businesses thrive in the digital age. who helps businesses thrive in the digital age. She spends her days speaking with and studying the most successful entrepreneurs in the new economy, and sharing her findings with those who are open to new ideas and want to increase their results. Follow her on Twitter @FrancineBeleyi.